After a hectic six years at FMG, Russell Scrimshaw has eyes for a new challenge.
THERE is a sparkle in Russell Scrimshaw’s eye when he talks about the heady days of Fortescue Metals Group, as it tried to do what seemed impossible – move from an idea to iron ore major in just a few years.
Mr Scrimshaw clearly revelled in the make-or-break attitude that took him around the world, raising billions to fund railways and selling contracts to sceptical steel producers.
It would be easy to think that, after six years as a senior FMG executive operating on a fly-in, fly-out basis from Sydney, Mr Scrimshaw has grown tired of the fast lane and wants a quieter life. But that is only part of the story, with his decision instead to step down from the management team in the near future and return to the role of non-executive director, which he held from 2003 to 2005.
Mr Scrimshaw’s track record – across a host of sectors around the world – hints at a restless nature, a need to be doing something new.
After an early career with IBM he held executive positions with technology companies Alcatel and Amdahl USA before joining Optus in its start-up phase, the latter being the closest thing to FMG that he can think of.
“Doing anything for the first time is exciting,” Mr Scrimshaw admits.
And there are plenty of examples of that in his recent years with FMG. The qualified accountant, whose Asian experience was based on time spent with IBM in Japan decades earlier, may have been nominally in charge of FMG’s back office operations and finance, but in a small company going places you have to be a jack-of-all-trades. For instance, he found himself heading up the drive to win customer contracts, which were needed to raise $2 billion for the infrastructure required.
“I was learning about China on the job; I had been to China once (before FMG) in 1985 when I worked for IBM,” Mr Scrimshaw says.
“We agreed we would not come back from China until we had 20 million tonnes of contracts. I knew I didn’t want to stay over there for 12 months.
“We picked a steel mill conference where we knew all the big steel mills would be and lined up meetings with them all.
“We must have had 40 meetings with different steel mills; we had to allocate time so they each got an hour and we gave it our best pitch for that hour and we had to throw them out the door, not literally, and move on to the next guy.
“We had to develop a patter that sold them on the company, sold them on why this was important for them to do this and got them comfortable enough that they would commit to an agreement, within an hour.
“Some of the discussions were legendary.”
Mr Scrimshaw particularly remembers deliberately striking up a conversation about kites with a private steel mill owner from the Chinese kite capital called Weifeng, whom he describes has having a ‘larrikin swagger’.
He says much of the meeting was taken up with a conversation about kites and all the acrobatics they go through, leaving just a few minutes to discuss FMG.
Nevertheless, the mill owner – having done his own research on FMG – signed up for 1.5mt per annum over 10 years.
“We just wet ourselves laughing because we sold a $1 billion contract, when you multiply that up over 10 years, literally after five minutes,” Mr Scrimshaw says.
While FMG clearly retains some of that can-do attitude, it is now a big company. A visit to the company’s headquarters in the office complex adjoining the Hyatt Hotel reveals the immensity of a firm that was little more than a concept when Mr Scrimshaw became involved.
Like one of its surface scrapers digging up the Pilbara ore, FMG has consumed the office space around it, knocking down walls to create a huge open plan office in which all the executives sit alongside their staff.
The company’s leadership is changing, too, evolving rapidly from the group of true believers who founded and built a company from scratch to a broader skills set to match the company’s profile as a major listed producer.
Mr Scrimshaw is the latest of those early arrivals to step down from the management team. His decision follows that of Graeme Rowley, who left the management team a year ago but, like Mr Scrimshaw, remains as a non-executive director.
Mr Scrimshaw’s involvement with the FMG board goes back to 2003 when he, Mr Rowley and Herb Elliott joined the fledgling iron ore operation, which started with an office in founder Andrew Forrest’s home.
Apart from the memories, Mr Scrimshaw has done well financially from his time at the company. According to FMG’s 2010 annual report, he had 8 million FMG shares and 600,000 options late last year. These days the shares alone would be worth nearly $50 million.
But Mr Scrimshaw does not appear to be banking the money and putting his feet up. While he is keen to be back closer to his family, including grown-up adult children, in Sydney, that twinkle in his eye reappears when he talks about his latest venture.
He has joined the board of Sirius Minerals, a potash company with tenements in the UK run by Chris Fraser, the Citigroup banker who financed FMG, and chaired by Chris Catlow, a former key FMG executive.
While his is a strictly non-executive role, it isn’t hard to see Mr Scrimshaw is excited by the prospect of getting involved.
